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Fairtrade and Fairmined Gold

Empowering responsible artisanal and small-scale miners

Alliance for Responsible Mining | February 11, 2013

EXECUTIVE SUMMARY

Gold: symbol of love, power and wealth. But look behind the glitz and the reality is not so glamorous. Some 90 percent of the labor force involved in gold mining is made up of artisanal and small-scale miners. Fifteen million men, women, and children work in harsh conditions, doing backbreaking work to scrape a living. They produce 200–300 tons of gold each year, around 10 percent of the global gold supply. Exploited by some middle men, their access to markets is limited and they rarely receive a fair price for their product.

The poor and vulnerable in Africa, Asia, and Latin America are driven into artisanal mining because it can offer an alternative way to earn a living where agriculture or other activities are simply not viable. However, they face a multitude of challenges as they struggle to survive. The current increase in gold prices is driving millions more into this sector.

Most mining laws are geared towards large-scale industrial mining, and governments tend to give the large-scale industry preferential mining rights. This increases the vulnerability of small-scale miners who find it hard to access legal mining rights, pushing them into running informal and illegal operations. Working conditions are hazardous and health and safety measures insufficient. The unskilled handling of toxic chemicals such as mercury and cyanide poses severe risks to miners, their communities, and the natural environment.

Tracing gold from buyer to jewelry manufacturer to refiner is notoriously difficult, and the gold industry has been slow to open its doors to scrutiny.

If that wasn't tough enough, artisanal and small-scale miners are at the sharp end of a long and complex supply chain over which they have little control. Tracing gold from buyer to jewelry manufacturer to refiner is notoriously difficult and the gold industry has been slow to open its doors to scrutiny. This lack of transparency makes it virtually impossible for consumers to know where and under what conditions the gold in their jewelry was mined.

The international Fairtrade movement and the Alliance for Responsible Mining (ARM) are working together to bring to market the first ever Fairtrade and Fairmined certified gold jewelry. As consumers become increasingly concerned about the conditions in which precious metals are mined, this groundbreaking initiative offers a lifeline to economically disadvantaged artisanal miners and their communities.

FLO and ARM have developed a set of clearly defined standards for responsible mining, which must be met by mining organizations to achieve Fairtrade and Fairmined certification. The standards are based on ARM's Standard Zero, and were tested with nine miners' organizations in Bolivia, Colombia, Ecuador, and Peru, in a process that has helped them to formalize and improve their mining and business practices. The standard is open to organizations in Latin America, and work is already underway to expand the initiative to Africa and Asia in the near future.

Miners gain market access and receive a Fairtrade premium equivalent to ten percent of the international price.

Miners' groups are proof that with training it is possible to meet strict standards on working conditions, child labor, women's rights, cleaner technology, health and safety, management of chemicals, and responsibility to the environment before the gold they produce can be certified as Fairtrade and Fairmined.

In return, the miners gain market access and receive a Fairtrade premium equivalent to 10 percent of the internationally agreed price of gold, which must be used to improve their business or for community development projects. Those miners' organizations that produce their gold without the use of mercury or cyanide can earn an additional ecological premium of 5 percent to recognize the additional costs involved in using cleaner technology.

Through these fully transparent and traceable supply chains, consumers and retailers can have confidence that artisanal and small-scale miners are getting a fair deal and responsible mining practices have been used.

But this is just the start of the journey. Fairtrade and Fairmined certified gold has the potential to enable thousands more artisanal miners to escape from unfair supply chains and dangerous working conditions. Although even the most marginalized miners have improved their profit margins and revenues due to the increasing price of gold, many artisanal and small-scale miners are still vulnerable as they are unable to access the enormous profits being made on gold further up complex supply chains.

Expanding the support to miners' organizations so that they can achieve Fairtrade and Fairmined certification and encouraging more retailers to stock Fairtrade and Fairmined gold are vital next steps. However, governments must also help artisanal and small-scale mining organizations to gain access to legal mining rights and create sound laws to govern and support a sustainable artisanal and small-scale mining (ASM) sector.

External Link: CONTINUE READING: Fairtrade and Fairmined Gold [PDF]

Read More: Business, Development, Environment, Health, Human Rights, Mining, Jobs, Trade, Youth, Bolivia, Colombia, Ecuador, Peru, Africa, Asia, Americas

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